Financial woes for OFWs

Overseas Filipino workers (OFWs) face financial woes with the pending implementation of the TRAIN law and other additional taxes.

Leaders of the local recruitment industry yesterday advised Filipinos abroad, particularly those staying in Saudi Arabia and the United Arab Emirates (UAE), to adopt savings plan to cushion the negative impact of higher taxes.

Recruitment official Lito Soriano said though not directly, OFWs are still likely to be hit hard by the TRAIN law.

“Prices of goods and services their families here are using will go up due to TRAIN and since most OFWs are the breadwinners they would be affected, too,” Soriano explained.

Remittances may not be subject to taxes, but Soriano said banks and money transfer companies impose “transfer charges” which are covered by taxes.

“Remittance transfer charges within the Philippines are subject to tax levy and OFWs or their families will have to pay for these,” Soriano explained.

Other recruitment officials said OFWs who will decide to put up new business will also have to pay taxes under the TRAIN law.

Aside from the TRAIN law, Soriano said OFWs in Saudi Arabia and UAE must also pay value added tax (VAT) that the two Arab countries have started imposing since Jan. 1.

Soriano said the governments of Saudi Arabia and UAE imposed five percent VAT on most goods and services to boost revenue after oil prices collapsed three years ago.

“Goods and services in Saudi and the UAE used to be taxfree, that is why many of our OFWs are now complaining because the new taxes will cut down their income,” Soriano said.